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Pawn shop owner weighs in
Thompson says industry aims to help people
Hope Thompson, owner and operator of Wanted or Not Swap & Pawn, stands behind the counter of her business in the Cloverleaf Shopping Center. Thompson says most of the people who come to her shop are good people who need help. (Bulletin photo by Paul Collins)
Tuesday, August 23, 2011
By PAUL COLLINS - Bulletin Staff Writer
Hope Thompson said her pawn shop helps more good people than bad.
"There's bad apples in everything. I'm not helping bad people. I'm helping good people in proportions way higher than bad people who slip through once in a while," said Thompson, owner and operator of Wanted or Not Swap & Pawn south of Martinsville.
Her clientele, she said, includes "professionals, retired people, dislocated workers ... people in a tight spot."
Pawn shop customers either sell items or get loans and put up merchandise as collateral. If they do not repay the loan, the shop can sell the merchandise.
Martinsville is considering restricting pawn shops, which currently are allowed by right in city areas zoned for commercial and manufacturing uses.
Thompson is selective about what she buys. She accepts gold and newer electronics, such as some game systems, televisions, laptops, digital cameras and other items.
The interest she charges, which is regulated by the commonwealth, is less than payday loans, she said. The Virginia law code dictates how much interest a pawn broker may charge.
Thompson estimates that since she opened the business in 2002, there have been about 15 cases in which people who sold or pawned goods at her business were charged by law enforcement and had to go to court for such things as larceny and obtaining money by false pretenses.
In addition, there are on average about one or two cases a year that are resolved without going to court, she said.
According to the National Pawnbrokers Association, less than half of 1 percent of all pawned merchandise is identified as stolen goods.
Thompson said generally people who commit crimes avoid pawn shops because of all the government regulations, which she compared to a net to catch criminals. A person who steals property generally is not going to come into a pawn shop, have to identify himself or herself and leave a paper trail, Thompson said.
"I use any available knowledge" about a customer's background, she said. "It's good for me to know who I'm dealing with."�
And if something seems suspicious, Thompson may not do business with the customer, she said.
Thompson said she scans pawn customers' driver's licenses into her computer and has several video cameras recording what happens in her business.
"Sometimes it seems more like a mission then a business. They (customers) depend on you," she said. "I can't meet all the demand."�
Because of the weak economy, she said she has a cash flow problem because she makes more pawn loans than she is able to sell property. For instance, she has 14 Wii video game systems in stock, "and no one has money to buy them," she said.
When the economy was better, about 75 percent of her customers who pawned property repaid their loans and reclaimed their property. But as the economy worsened, the ratio dropped to about 50 percent.
Recently the ratio has risen to about 60-65 percent paying off their loans and reclaiming their property, and 35-40 percent not, Thompson said. "I'm seeing an improvement."�
Pawn customers repay their loans and redeem their collateral at a national average rate of about 80 percent, according to the National Pawnbrokers Association.
"We're a poor man's bank," Thompson said. "Millions of people are unbankable; they can't use a bank" because of such things as bad credit, she said.
Failing to repay a pawn loan has no effect on a customer's credit rating, nor does it have legal consequences, according to Thompson and the National Pawnbroker Association.
Thompson is a former treasurer of the Virginia pawnbrokers association and the daughter of Beckley, W.Va., pawnbrokers Al and Anita McNiel.
Thompson said she complies with state and federal requirements - Henry County has no special pawn shop regulations - and she goes beyond. For instance, she has records since she opened the business in April 2002, though she is not required to keep records that far back, she said. Another example is she won't accept class rings less than 30 years old unless the customer's ID matches the name or initials on the ring.
The commonwealth requires a pawnbroker to have a license and a bond, and it requires that the pawnbroker not have been convicted of a felony or crime of moral turpitude in the last 10 years. The law requires detailed records on each transaction and daily reports that go to law enforcement, among other requirements.
A brochure by the National Pawnbrokers Association says: "Pawnbrokers are governed by all the major federal laws that apply to other entities designated as financial institutions," including the USA Patriot Act, Truth-in-Lending Act, IRS regulations and others.
In addition to a business license, Thompson said, she has a precious metals and gems permit, which is required by Henry County and which requires additional bond, she said.
"Overall, the industry is growing; the ethics are outstanding," Thompson said, adding that the National Pawnbrokers Association has "Best Practices for the Pawn Industry," has a code of ethics and gives scholarships.
She said the common image of pawn brokers on TV and in the movies is "a stigma," and when talking to Martinsville City Council members, she has used the comparison that not all politicians are corrupt.
She and her husband, Kevin Thompson, own Laurel Park Mini Golf and rent mobile homes. He formerly was a production leader and now is a process engineer at Loparex in Eden, N.C. She also manages Martinsville Postal Credit Union Inc. and CCC Martinsville Employee Credit Union Inc. and has a bill-pay service. They have three children.
She is a former tax preparer and bookkeeper for Kathleen Odell and Associates.
"I have integrity. I have morals," Thompson said.
She was the PTO treasurer for Irisburg Elementary School for several years and after-prom treasurer at Magna Vista High School in 2009, and her books underwent county audits. "I always had an excellent rating," she said.
"I don't just run a pawn shop. I'm part of my community," she said.
Officials with another pawn shop in the county, K&F Pawn Shop in Axton, could not be reached for comment.